Menendez says he called gov't in way to help donor

By KELLI KENNEDY, Associated Press

Thursday, February 7, 2013

WASHINGTON (AP) — Sen. Robert Menendez acknowledged Wednesday that his office contacted U.S. health agencies in a way that would help his biggest political donor in his re-election, the same doctor whose private jet Menendez used for two personal trips to the Dominican Republic.

The senator denied to The Associated Press that he sought to intervene improperly in billing disputes between the doctor and the government.

Menendez, D-N.J., said he contacted the U.S. Centers for Medicare & Medicaid Services to ask about billing practices and policies. The contacts came during a dispute between CMS and Dr. Salomon Melgen, a longtime friend and campaign supporter of Menendez. The FBI searched Melgen’s offices last week.

“The bottom line is, we raised concerns with CMS over policy and over ambiguities that are difficult for medical providers to understand and to seek a clarification,” Menendez said.

The senator called federal health officials in 2009 and met with them again in 2012, each time urging them to change what he called an unfair payment policy which had cost his friend Melgen $8.9 million, according to an official close to the investigation who spoke on condition of anonymity because the person is not authorized to talk about ongoing investigations.

The official said Medicare held firm on the billing dispute and ordered the money repaid. It’s unclear whether Melgen has repaid all or just some of the $8.9 million. He currently is appealing his case.

Medicare providers accused of fraudulent or improper billing are allowed to appeal their case, even after being fined or suspended from the program.

Melgen contends he didn’t fraudulently bill the taxpayer-funded Medicare program but was confused about what was allowed, the official said.

Melgen treated patients suffering from macular degeneration with the costly drug Lucentis, which runs about $2,000 a vial. Melgen was only giving patients portions of the vial, which is allowed, but he was billing the government for the entire amount, the official said.

The drug has been the subject of controversy and in a 2012 report from the Health and Human Services inspector general, the agency recommended that Medicare officials stop using the drug because there was a cheaper and equally effective alternative.

Menendez, who spoke during a roundtable with reporters and others on Capitol Hill, subsequently told the AP he did not try to intervene with government regulators on Melgen’s behalf. In a statement, the senator’s spokeswoman, Tricia Enright, said Menendez “was never aware of and has not intervened in any Medicare fraud investigation on behalf of Vitreo Retinal Consultants,” Melgen’s company.

The Senate Majority Leader, Harry Reid of Nevada, urged Menendez to stop publicly discussing his business relationship with Melgen, a Florida ophthalmologist and entrepreneur. Reid cited a pending inquiry into the matter by the Senate Ethics Committee but praised Menendez as an invaluable leader.

“We all have these issues come to us,” Reid said. “We have to work our way through it. I would suggest my friend he shouldn’t get into this today.”

Menendez has acknowledged that he flew on Melgen’s private plane and failed, initially, to properly pay for the trips. He told reporters he reimbursed some $58,500 from his personal funds.

The events have engulfed Menendez, 59, just as he assumed the chairmanship of the Senate Foreign Relations Committee, succeeding former Sen. John Kerry, who resigned last week to become secretary of state.

Melgen has been a friend and political supporter of Menendez for many years. Last year, Melgen’s practice gave $700,000 to Majority PAC, a super political action committee set up to fund Democratic candidates for Senate. Aided by Melgen’s donation, the super PAC became the largest outside political committee contributing to Menendez’s re-election, spending more than $582,000 on the senator’s behalf.